The Bible is as clear as mud on many subjects, but it’s absolutely clear about the practice of usury (lending money at a high rate of interest). As far as I’m aware, there are no Bible verses that encourage Christians to engage in usury, but there are a number that prohibit it:
And if thy brother be waxen poor, and fallen in decay with thee; then thou shalt relieve him: yea, though he be a stranger, or a sojourner; that he may live with thee. Take thou no usury of him, or increase: but fear thy God; that thy brother may live with thee. Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase.
But if a man be just, and do that which is lawful and right… And hath not oppressed any, but hath restored to the debtor his pledge, hath spoiled none by violence, hath given his bread to the hungry, and hath covered the naked with a garment; He that hath not given forth upon usury, neither hath taken any increase, that hath withdrawn his hand from iniquity, hath executed true judgment between man and man, hath walked in my statutes, and hath kept my judgments, to deal truly; he is just, he sh all surely live, saith the Lord GOD.
If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury.
Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury.
So it was a surprise to find during a recent review of Kiva micro-loans that 21 out of the 95 microfinance institutions partnering with Kiva to make microloans to poor people around the world are avowedly Christian in identity and self-professed motivation. The average annual rate charged in interest and fees by these 21 Christian microfinance institutions is listed is 45.9%, higher than the overall average of 36.9% for all 95 microfinance institutions working with Kiva.
The 21 avowedly Christian institutions working through Kiva are listed below, grouped by the annual percentage rate charged in interest and fees to the poor people they “serve”:
Christian microfinance institutions charging more than 50% in annual interest and fees
Turame Community Finance: 71.3%
Sinapa Aba Trust: 62.6%
Urwego Opportunity Bank: 62.6%
Center for Community Transformation Credit Cooperative: 62.0%
HOPE Ukraine/Nadiya: 52.4%
Tanaoba Lais Manekat Foundation: 50.3%
Alalay sa Kaunlaran: 50.2%
Christian microfinance institutions charging between 25% and 50% in annual interest and fees
Vision Finance Company: 48.1%
Esperanza International Dominican Republic: 44.3%
Hagdan sa Pag-usag Foundation: 35.5%
Christian Rural Aid Network: 33.6%
SMEP Deposit Taking Microfinance: 29.5%
Banco D-MIRO S.A.: 27.4%
Kenya Agency for Development of Enterprise and Technology: 27.1%
Christian microfinance institutions charging between 15% and 25% in annual interest and fees
Christian microfinance institutions charging less than 15% in annual interest and fees
Only CAURIE lending comes close to charging at a rate that you or I would find acceptable in our relative comfort. Some defenders of these ultra-usurious microfinance practices will say that there’s no way to get money to poor people otherwise because of various difficulties involved in poor countries that create large overhead and necessitate high interest to cover expenses. But that’s only true if you’re interested in getting your money back. The alternative is outright charity through the distribution of micro-grants, not micro-loans. There are a number of micro-grant institutions out there that don’t practice usury in target communities. If you’re looking to apply your Christian faith to do good rather than get a monetary return, consider the micro-grant approach instead.